Sam Smith Advertised - Accounting Assignment

Internal Code : MAS4216

Accounting Assignment

Questions : A. Prepare general journal entries for August, using appropriate account titles. Ignore GST. B. What is the profit for August if a cash basis of accounting is used? Explain your answer. C. What is the profit for August if an accrual basis of accounting is used? Explain your answer. D.Each year, Prime Medical Centre (PMC) refers approximately 6,000 patients to a nearby laboratory for a standard blood test. The laboratory charges patients $150 for each test. PMC's financial director, Josephine Jekyll, believes that PMC could profitably offer this service in-house. She carries out some investigations. Josephine finds that the equipment needed to perform standard blood tests can be leased for $100,000 per year, but a full-time technician would have to be employed at an annual gross salary of $90,000; a part-time laboratory assistant would have to be employed for three days per week at an annual gross salary of 50,000; and additional space would have to be leased at an annual cost of $35,000. Josephine estimates that the cost of performing each test (e.g. supplies, electricity, cleaning) is $40 per test.